First-year medical students wear their traditional "garb" at the traditional "White Coat Ceremony" at the Albany Medical College in Albany, NY on August 12, 2009. (Lori Van Buren / Times Union)

First-year medical students wear their traditional "garb" at the traditional "White Coat Ceremony" at the Albany Medical College in Albany, NY on August 12, 2009. (Lori Van Buren / Times Union)

Photo: LORI VAN BUREN

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St. Peter's Hospital in Albany, NY, will be part of a merger between St. Mary's Hospital, St. Peter's, Samaritan and Albany Memorial Hospitals, discussed at a press conference in Troy, NY on Tuesday June 22, 2010. FOR ERIC ANDERSON STORY. ( Philip Kamrass / Times Union) less

St. Peter's Hospital in Albany, NY, will be part of a merger between St. Mary's Hospital, St. Peter's, Samaritan and Albany Memorial Hospitals, discussed at a press conference in Troy, NY on Tuesday June 22, ... more

Photo: PHILIP KAMRASS

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On the right side of a training gap

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A new report from the Brookings Institution in Washington, D.C., which found that unemployment is caused by a combination of decreased demand for workers and a gap between worker education and job opportunities, holds some good news for Albany.

Of the 100 largest metropolitan areas studied, the Capital Region stood out as one of the most robust areas with a low education gap and a resilient economy.

The report found that the average years of education demanded by U.S. jobs grew from 13.37 to 13.54 between 2005 and 2009, slightly outpacing the average years of education attained by workers.

This shortage of educated workers relative to employer demand reflects a decline in blue-collar industries such as construction and manufacturing, and a growth in industries like health care, education and professional services that are more education intensive.

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Despite the national trend, the education gap in the Capital Region has mostly remained unchanged. Syracuse and Buffalo are among the few metro areas that have actually increased their supply of educated workers faster than demand.

Other parts of the country, such as Tucson, Ariz., and Jackson, Miss., however, have lost skilled workers and widened the gap.

Education gaps help explain differences in unemployment rates across the nation, the report says. Metropolitan areas with larger education gaps were found to have consistently higher unemployment rates. Washington, D.C., Boston and Minneapolis were among those with the smallest gaps. The Capital Region ranked number 21 in education gap size.

Inadequate education is not the only factor, however. Industry composition was found to play a roughly equal role in influencing unemployment rates. Metro areas with more economically resilient industries -- oil and gas extraction, health care, education and the federal government -- fared better than areas with more vulnerable industries -- wood product manufacturing, textile mills, construction and transportation equipment manufacturing.

The Capital Region ranked number four on combined measures of the education gap and industry composition, just below Washington, D.C., Madison, Wis., and Boston.

"The Albany area stood out as one of the best situated metroplitans areas in that it had a favorable match between what workers supplied in terms of education and what employers demanded," senior research analyst at Brookings and co-author of the report Jonathan Rothwell said.

"Not only that, it had a favorable mix of industries that performed well during the worst of the recession -- the public sector, health care and educational services and some professional services. These industries were more common in Albany than in the rest of country and sheltered it from the worst aspects of the recession," Rothwell added.

Moreover, "manufacturing in Albany is better than typical manufacturing in that it's able to tap into the growing demand for green energy products through GE and its establishments," Rothwell said.

The Capital Region has an unemployment rate of 7 percent, compared to 9 percent nationally.

The current levels of unemployment resulted from both short-term and structural problems, the report shows. During the worst period of the recession, lack of demand for workers was the major cause of rising unemployment. As the recession evolved, however, the education gap, an underlying structural problem, grew in importance to rival the weakness in industry demand.

Metropolitan economies would thus benefit not only from diversification toward growing industries but also a concerted effort in boosting educational attainment to solve the underlying structural problem, the report says.